Business: 02/01/2012

Wednesday, February 29, 2012

Indian economic growth slips to 6.1%

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A sharp fall in India's economic growth to 6.1 percent in the quarter to the end of December, the slowest in three years, he unleashed fears of a prolonged decline if emergency steps are taken this month.

A slowdown in manufacturing and mining has accelerated the shift of the Asian third largest economy in the underlying growth after a failed push to hit double digits. A collapse in investment also increased expectations that the Reserve Bank of India may cut benchmark lending rates at its next policy review meeting on 15 March.

Rajiv Kumar, the director general of the Federation of Indian Chambers of Commerce and Industry, said that Wednesday's "sobering" gross domestic product data set an official target of 6.9 per cent growth for the full fiscal year, out of reach and bounce back next year in doubt.

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Mr Kumar said India's domestic driven economy is facing the possibility of poor performance in the current fiscal year than the year of the global financial crisis and the collapse of Lehman Brothers, U.S. banking group.

Many economists consider India's woes as a self-inflicted. They emphasize the overwhelming drop in investment in response to high interest rates, the paralyzed Congress-led government, and over-reliance on welfare-driven consumption.

Corporate investment has fallen to 14 per cent of the GDP of the 18 percent it registered in the five years to 2008. Exports have slipped from 23 percent last year to 14 percent this year. Government market borrowing, dropped to 3 per cent four years ago, is now running at 6 per cent of the GDP.

Data released Wednesday showed economic growth slowed to 6.1 percent annualized from 6.9 percent in the previous part, weighed down by two years of gradual monetary tightening, withdrawal of foreign capital and weakness local currency.

By comparison, China's economy grew at 8.9 per cent in the quarter to the end of December.

Sonal Varma, an economist at the Japanese banking group Nomura in Mumbai, said the slowdown in India were "clearly evident".

"What is surprising is the slowdown in investment and manufacturing are worse than during the 2008 global financial crisis. It is the worst for these sectors for a decade," she said.

Chandrajit Banerjee, the director general of the Confederation of Indian Industry, also expressed concern that gross capital formation time, reflecting the "bleak investment outlook."

He warned of the "near stagnation" of the industrial sector and the contraction of the mining sector over two equal parts.

"All policy levers should be used to drive a revival in the economy," he said, asking for interest cuts, faster project clearances and great efforts to stimulate manufacturing.

Economists and fund managers took heart of efforts by Manmohan Singh, the prime minister, to power the economy during the past two months, and undo the damage of what some call "comma policymaking" and macroeconomic uncertainty.

They placed considerable store in the central bank monetary policy review meeting this month and the national budget in March 16 to take action to arrest the slide in growth.

"A condition for growth to accelerate ... and for India to return to the 9 per cent growth trajectory is a jump-start in the private investment cycle," said Jahangir Aziz, chief economist of JPMorgan Chase in Mumbai.

Some consider the economy to be back outside. But others say more needs to be done quickly to revive investor sentiment and supported the bloom in India's financial markets with fiscal consolidation, overcoming supply constraints and delivering policy reform.

"Unless action takes place by the government to stimulate growth, the outlook looks very ill," said Samiran Chakraborty, economist at Standard Chartered Bank in Mumbai.

Monday, February 27, 2012

Sensex extends rally; banks, metals, oil & gas lead

The market continued to see gains as traders and investors to pick up oil & gas, banking, metals and energy stocks. The Sensex rebounded after losing nearly 1000 points in the previous four sessions. The BSE benchmark gained 220.5 points to trade at 17,666.26 and the nIf benchmark rose 68 points to 5,349.45. The Nifty March futures added 57 points premium to trade in 5406.

Over the next 2-3 days, Mithil Pradhan, senior vice president of technicals and derivatives at Violet Arch Capital advisers said he would be looking at signs of strength. "I belong to the bull camp, and I changed the whole strategy of selling on rallies to buy on declines. So if the market is giving me an opportunity to return to the 5200-5300 range, I am actually going to be a buyer," he added.

Index heavyweights Reliance Industries, SBI and ICICI Bank rallied 2-2.5%. HDFC and HDFC Bank rose 1-2%.

Acts of Tata Motors, Tata Steel, BHEL, Sterlite and Hindalco led the buy list, rising 3-4%.

Among others, L & T, Bharti Airtel, ITC and ONGC won 0.4-1%.

However, only TCS underperformed among Sensex 30 stocks, falling 1%.

The broader markets exceeded benchmarks - the BSE Midcap and Smallcap indices climbed nearly 2%.

About three shares advanced for every share falling on the BSE.

At 9:19 hours IST, Nifty bounces back above 5300, RIL, ICICI Bank gain

The Sensex added about 190 points in early trading after falling sharply in the last four sessions. Banks, oil & gas, capital goods, metal and auto stocks supported the purchase. The BSE benchmark gained 191 points to trade at 17,637 and the nIf benchmark Nifty rose 60 points to 5,341.

Largecaps as ICICI Bank, Axis Bank, SBI, Kotak Mahindra Bank, PNB, Reliance Communications, Reliance Infrastructure, BHEL, Reliance Industries, ONGC, JP Associates, Hindalco, Sixth Goa (after a fall of 10.5% yesterday) it was up to 1.5- 2% in early trade.

The CNX Midcap Index rose 70 points to 7,421. The market breadth was strong as a wide markets massacred quite badly in recent sessions. About five shares advanced for every share falling on the National Stock Exchange.

In the second line shares, GVK Power, Lance Infratech, Adani Power, Suzlon Energy, BGR Energy and Voltas gained 2.5-4%.

UB Group companies bounced back media reports that two foreign carriers have shown interest in picking up stake in Kingfisher. Kingfisher Airlines, United Spirits and United breweries Holdings was up 4.6% -5.5%.

Gujarat NRE Coke, Firstsource, Titan, Jain Irrigation, Pantaloon Retail, Evereardy and Bank of Maharashtra rallied 2-4%.

However, Bajaj Hindusthan was down 1%.

On the global front, Asian markets were mixed train. Shanghai fell 0.4% and Nikkei fell 6% while Hang Seng, Straits Times and Kospi rose 0.1-0.4%. The U.S. equity markets were flat.

Sunday, February 26, 2012

Sterlite Industries, Sesa Goa Drop on Vedanta Debt Concern: Mumbai Mover

Business

Wednesday, February 29, 2012

Indian economic growth slips to 6.1%

Monday, February 27, 2012

Sensex extends rally; banks, metals, oil & gas lead

Sunday, February 26, 2012

Sterlite Industries, Sesa Goa Drop on Vedanta Debt Concern: Mumbai Mover

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